Gate contract trading caused a $120,000 position liquidation and a $100,000 loss

How can users trust you, Gate Exchange @Gateio_zh!

Yesterday, during the $la trading process on the gate exchange, the la price increased 10 times in one minute, seriously deviating from the on-chain price and the spot price of other exchanges. During this process, I was unable to increase or close positions.

The 2,000 transferred to the unified account in the middle was swallowed up, which was equivalent to the money I owed the platform.

After the incident, I immediately contacted the gate Chinese spokesperson, @kevinlee_gate, who likes to wear suits.

I did not directly fire on Twitter. In the spirit of handling the problem first, I believe that the platform can handle it properly.

I submitted my uid and liquidation delivery order, and made speculations from the perspective of a trader based on the cause of the incident.

And the result I got was that the position liquidation was wiped out and the liquidation was not compensated.

The specific process is as follows:

One: Decision-making is arbitrary and the problem handling is untrustworthy.

After the incident, Kevin in a suit replied to @Elizabethofyou on Twitter that there was no need to worry, and the transaction would be rolled back. (The relevant post has been deleted, with screenshots)

I chatted with Kevin privately, and he also told me to roll back immediately.

Friends who often open exchange groups should know that my first feeling when I heard about the rollback solution was that this guy made a decision on the spur of the moment.

If a rollback is executed, the delivery orders and delivery amounts of the closed positions (regardless of whether they are profitable or not) must be recalculated, so the money that has been removed from the unified account and withdrawn cannot be calculated, and the rollback is extremely difficult, so it is better to take compensation measures.

When gate released the information on handling abnormal transactions, the spokesperson publicly released the rollback information, and changed the compensation plan without keeping his word. In the end, only compensation for the liquidation was paid, and no liquidation was handled.

2: No compensation for liquidation, who is to blame for the index price deviation?

I asked Kevin why he didn't pay for the liquidation, and the man in the suit replied that it was because other exchanges had pulled the price down to 60u, causing the index price to deviate tenfold from the spot price in one minute.

The index price of this trading pair comes from six exchanges: Binance, Bybit, Gate, OKX, KuCoin and MEXC. (Official announcement)

After investigation, only KuCoin and MEXC listed the spot at that time. The price of MEXC was normal during the same period, while that of KuCoin was abnormal.

According to the Kucoin order book information, the initial liquidity is very small, and only about 5000U of taker orders can break through the liquidity.

It is because of Kucoin's 5000U order that all users on Gate have their positions blown up.

Within one minute of the blowup, you cannot close your position or add positions.

And according to the official announcement of Gate:

The perpetual contract index price can effectively reflect the market fair value of the underlying asset, https://t.co/cBKdpraJfr will automatically remove the abnormal market price index component.

In summary, the mechanism deviates from the official documents, the product cannot perform any operations, and in terms of security, only 5000U from other exchanges can cause the users of this exchange to blow up.

Three: Order information tampering, the cost of doing evil is extremely low.

After Gate issued the compensation for the blowup, the delivery note of the transaction was tampered with. I cannot comment on the relevant operations.

My feelings are:

My account, the order I placed personally, fluctuated and I couldn't operate. After the problem occurred, my personal operation was tampered by the platform.

@Han_Gate Han Lin, I have no intention to discredit gate. Based on the perspective of handling the problem, I communicated first. Based on the perspective of the principle of fact, I stated on Twitter. If there is any inaccuracy, I can modify it.

Let me ask:

Who dares to use an exchange that handles problems hastily, deviates from the data mechanism, has product operation defects, weak security, and tampered with user information?

If the reason for non-compensation is simply due to the unfairness of the index problem, then:

I opened a password-free payment for you, and you marked a chewing gum for 80u. I paid the transaction without password, and you told me that you wanted to trade it yourself. I saw that some stores also marked 80u. What's wrong?

Today, under such a treatment, the Gate Exchange still boasts of a sense of responsibility to make liquidation compensation.

And the reason is simply the 5000U upward liquidity of other exchanges and such a low cost of doing evil.

While you are advocating justice and responsibility, I feel sad.

Justice and evil always take your name.

I am not a legal professional, but I believe @Honglin_lawyer Liu can help with the legal issues.

At the same time, the users who were liquidated and lost their positions have also organized themselves in an orderly manner to form a rights protection group.

I hope that the Damen Exchange Center will handle the relevant matters.

Personally, I only dare to trade at @cz_binance @star_okx home now.

I’m scared.